“As the student accommodation market moves from being an ‘alternative investment’ to an established property sector, Global Property Scene takes a look back at the market and asks whether private student accommodation is here to stay.”
Over the past decade, the UK property market has undergone a staggering transformation; with the more traditional forms of buy-to-let investments being shunned in favour of so-called alternative ventures. One sector which has clearly risen above the rest is the student accommodation market.
This lucrative sector continues to dominate the UK property market, recording average annual returns in 2012 of 9.6 per cent across the board and regional returns of between 6.5 and 7.25 per cent, as reported by property experts Knight Frank.
Outperforming all other forms of property investment in the UK; private, boutique student residences are one of the most lucrative ways of expanding an investment portfolio, due to the stable yields and low void periods which are common for this type of property. Capital investment in this sector amounted to more than £2.7bn in 2012 – more than double the volumes invested in 2011, showing a level of confidence from investors in the property market, not seen since the boom years.
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